MLB free agency explained

Bryce Harper
Bryce Harper received one of the biggest MLB free agent contracts of all-time. Photo from NYT.

Even some old-school baseball fans often need to have the MLB free agency explained. So, there’s no need to feel embarrassed if that’s your case. We’ve got you covered.

Major League Baseball features a luxury tax. That’s because there’s only a soft salary cap in operation. This tax can often impact how teams deal with salary arbitration and free agency.

MLB free agency explained

As it happens in soccer and other sports, players sign contracts and are then free to sign with other teams once those contracts run out. But MLB free agency has a couple of tweaks that make it pretty unique.

Let’s break them down.

What does free agency mean in MLB?

As you can tell by its name, free agency means that players are free to sign with whichever team they please. They’re free to engage in negotiations with the teams that are interested in their services and sign contracts according to their market value.

Sometimes players test their market value and meet with other teams but they still come back to the club they played for last season. But, unless a player is handed a qualifying offer, his former team isn’t actually entitled to any sort of compensation if he decides to leave.

When does a baseball player become a free agent?

A baseball player can become a free agent after he’s reached six years of service in Major League Baseball. It also happens when the players’ contract extension expires or when teams waive them. However, in that case, the player is entitled to salary compensation depending on how and when he was released by his team.

It’s also worth noting that if a player who hasn’t reached six years of MLB service is released and he signs with another team, that team will be in control of his contract until he reaches that minimum threshold before being eligible for free agency.


Some players are eligible to sign qualifying offers once they reach free agency. Those are one-year offers valued at the mean salary of the 125 highest-paid players, set at $18.4 million in 2021. If a player gets a qualifying offer and signs with another team, then his original team is entitled to draft compensation.

How much do MLB free agents get paid?

This will all depend on the players’ time of service, contributions, and how much money is a team willing to pay for them. As we mentioned before, the mean is currently set at $18.4 million a year, $500,000 down from the 2020 mark.

Then again, most of the players sign for way less money than that. As of the 2021-22 offseason, the veteran minimum salary is set at $570,000 per year. For full contrast and a bigger picture, Mike Trout, the highest paid player in 2021, made a whopping $37.1 million despite missing most of the season.

How long does MLB free agency take?

Unlike with most leagues, Major League Baseball’s free agency lasts for several months. Starting on November 3 at 9:00 am ET in 2021, all players on expiring contracts are officially free agents. They can start meeting with teams right away but will have to wait at least 5 days before being able to sign with other clubs. Teams also have to make decisions regarding their contract options for players entering “team-option” years.

Free agents can sign with teams at any point through the offseason or even into the beginning of the following campaign. Needless to say, most major transactions go down during the first couple of weeks or months of free agency, while last-minute signings are mostly reserved for injuries or veteran players.

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